Software developed by a subsidiary of Rupert Murdoch’s News Corp to help journalists verify content on social media is also being used to monitor the videos and images viewed by reporters who use the tool.

The technology was built by Storyful, an agency that finds, verifies and licenses newsworthy or viral social media content on behalf of media organisations, including the New York Times, the Washington Post and ABC News in the US, and News Corp’s own publications and the public broadcaster the ABC in Australia.

In 2016, journalists were encouraged to install a Storyful web browser extension called Verify that informs users when videos or images have been verified and cleared for use by the company’s in-house journalists.

But the Guardian has established that data acquired through the Verify plugin is also being used by Storyful to actively monitor what its clients are seeing on social media. The incoming social media browsing data has been turned into an internal feed at the company that updates in real time.

More than 40 Storyful employees, including journalists, editors and senior executives at the company’s offices in Dublin, London, New York and Sydney, have been granted access to the feed, providing them with a window into what other journalists are looking at on social media.

The Guardian has obtained a recording of the feed, which is a purpose-built channel in Slack, a commonly used office software. The channel, called #verify-notifications, displays a constantly updated list of videos and pictures being viewed on social media. Over a four-hour period, more than 200 videos and photos are shown, beside the notification: “New item viewed by client.”

Recording of Storyful’s live feed of social media content as viewed by users who have installed the Verify extension

Two former Storyful insiders, who spoke to the Guardian on condition of anonymity, described how the feed was considered a resource that could be mined by journalists at the company looking for newsworthy, viral or monetisable social media content that is first spotted by clients.

“In my opinion it is tremendously wrong that this is going on,” one said, adding that journalists who have installed the software may have no idea their browsing activity is being monitored in this way.

Storyful strongly disputed that, insisting it made “clear disclosures” about how the extension works. “The data that Verify collects appears in an internal Slack channel called #verify-notifications,” it said in a statement. “Links flow into the Slack channel with no personal data that identifies the user who is viewing the content.” The company said the purpose of the channel was to “improve the user experience in order to serve our customers better”.

It said any allegation that the tool constituted a data breach or amounted to spying was “factually wrong and defamatory” and said: “We take privacy matters very seriously, we collect all data responsibly, and we are transparent in the way we use that data.”

Storyful, which was acquired by News Corp in 2013, uses its own team of journalists to verify material that appears on social media, from YouTube videos of military attacks in Syria to videos of pets posted to Facebook.

The Verify extension, which was launched in November 2016, was billed as a tool to streamline that process, providing what Storyful called “a one-click analysis of any piece of content on the social web”. Both the Telegraph and Reuters are understood to have previously used Storyful, which lists the BBC and Google as other clients on its website. It is not known whether journalists at any of these technology or media companies installed the Verify plugin, but the Chrome webstore suggests it has about 500 users.

Once a user has installed Verify and logged into a Storyful account provided by their employer, they see a green or red signal depending on whether the content accessed on Facebook, Twitter, Instagram, Vimeo or YouTube is on Storyful’s Newswire of content that has been cleared for use. Verify also has a button clients can use to voluntarily send content to Storyful that they would like the company to investigate content.

The hunt for newsworthy social media content has spawned a competitive industry, and there is often a race among reporters to find, validate and seek permission to use videos posted to Twitter and YouTube. Viral clips can be highly valuable, and in recent years Storyful and other companies have also begun licensing social media content, charging for its use and then sharing the revenue with whoever captured the image or video.

By using the Verify extension to automatically collect and monitor content other journalists are looking at on social media, Storyful can spot potentially lucrative videos and pictures that have been discovered by other reporters.

One of the former Storyful employees who spoke to the Guardian said it was considered as “a huge gain for the editorial team”, who were encouraged to monitor the channel in search of videos that could be valuable to the company. The source said they did not use the feed personally but they were given a detailed briefing on how it would be used. “It was all about the edge and seeing what people were watching across YouTube, Facebook and Twitter,” they said.

The second former Storyful employee said they occasionally used the feed to search for videos or photos that might be of interest to the company, adding: “All that was explained to me is that it would make it easier for us to see what our clients were watching.” Asked if they felt they were spying on other reporters, they replied: “Yes. We were sort of spying on them to see what they were seeing. I don’t know if they knew that we were doing it.”

A major problem with the feed, both of the former employees said, was that it did not distinguish between content viewed by a client for work and personal browsing content. “A lot of it was personal videos,” the second former employee said, recalling how the feed was full of people watching The Simpsons.

The recording obtained by the Guardian appears to confirm that. While it did contain photos and videos that might be of interest to media outlets, such as animal videos posted to Instagram and Facebook videos of extreme weather events, those were drowned out by what looked like a cascade of personal web browsing.

The feed included YouTube clips of Charlotte Church, ITV’s This Morning, Thunderbirds and Star Wars, as well as several Instagram and Facebook photos that appeared unconnected to work. Also them were Facebook photos of the wedding of a journalist whose employer has a contract with Storyful. The images appear to have been pulled into the feed after the groom’s colleague, who installed Storyful, perused his public photo album.

In a statement, Storyful said it did not have access “to posts marked as private on any platform” and said it was also “patently obvious” in a user’s browser when the Verify tool was active. “Clear disclosures relating to privacy and the functionality of the tool are given to all Newswire users that opt to install the Verify extension prior to installation,” it said.

When users install the Verify extension, they are shown a link to the company’s privacy policy, which explains how it uses data but makes no mention of the plugin. When the extension is installed, users are also warned: “It can read and change all your data on the websites you visit.”

The Guardian repeatedly asked Storyful for any further examples of what it described as “clear disclosures” to users about the how the tool was being used to monitor the browsing activity of clients.

The company pointed to a line in a 2016 blogpost introducing Verify, which stated: “Each tool we create is designed to improve our discovery and verification internally.” It also directed the Guardian to a 2017 YouTube interview in which David Clinch, its global news editor, gave a general overview of the tool. The clip had received fewer than 90 views at the time of writing.

Storyful said in its statement: “We have made very clear in our disclosures to users, in blogposts, and in interviews with the media how Verify operates, how it visibly travels with our client partners as they browse content across the social web, how we pay close attention to how our partners use the Newswire platform, how we analyse data, and also how we harness the power of our client partners and what they look for and look at in order to deliver them the news, trends and video content they need.

“As with any extension, the user retains complete control to install, disable, or uninstall the tool at any time they choose.”